Chinese steel exports slumped to a three-year low of 5.75 million mt in February as producers switched from selling overseas to serving domestic markets, where prices commanded a premium.
Total steel exports were down 23% from January and it was the third straight monthly decline, data released Wednesday by the General Administration of Customs showed. The total was also down 29% year on year.
China's renewed crackdown on induction furnace steel since January and production cuts implemented to reduce emissions were the main factors that boosted prices across the steel complex.
Steel futures in Shanghai rallied on speculation over the impact of the policies on steel supply, which led physical prices to hit the highest in more than three years as traders brought forward restocking on concerns that any delay might see prices rise further.
"February figures are already not bad," said a source at an eastern China mill, adding: "March will be uglier."
As Chinese domestic prices rose, the arbitrage window for steel of other destinations into Southeast Asia opened.
Singapore stockists said they bought large shipments of lower-priced Turkish rebar during the Lunar New Year, while Vietnamese re-rollers booked hot rolled coil from India and Russia, S&P Global Platts reported earlier.
Earlier this week, Chinese export offers for HRC and cold rolled coil fell for the first time in four and eight weeks respectively, reflecting a softening in domestic demand for flats.
But in the longs market, steelmakers have held on to their lofty offers in the meantime.
